Cosmopolitan posts $58.4 million quarterly loss

The Cosmopolitan of Las Vegas posted a $58.4 million third-quarter loss Monday as the luxury resort continues to struggle to attract gamblers to its casino.

The Strip hotel generated $23.8 million in casino revenue in the third quarter, compared with $28.2 million in the second quarter. For the nine months ended Sept. 30, The Cosmopolitan generated $83.1 million in gaming revenues.

The $3.9 billion resort opened Dec. 15. For the third quarter, its hold percentage was 7.6 percent, which was below the company’s expected range of 12 percent to 15 percent.

"Given the growing demand from our guests for high-end gaming facilities, now is the ideal time for The Cosmopolitan to debut the Talon Club," the company said in a statement. "This venue reflects the sophisticated design and attention to detail that our guests have come to expect from the resort."

The Talon Club will include 15 table games and is expected to be completed this month. The Cosmopolitan operates a 9,600-square-foot casino.

"We expect that the opening of this additional gaming space will help improve table-games volume with the benefits likely impacting results beginning in the first half of 2012," the property’s owner, Nevada Property 1 LLC, said in its earnings report filed Monday with the Securities and Exchange Commission.

Overall, Nevada Property 1, which is owned by Deutsche Bank AG, reported net revenue of $126.6 million in the third quarter. For the first nine months of the year, The Cosmopolitan lost $169.6 million on net revenues of $357.7 million.

Comparison with the same period last year is not relevant given the resort opened in the fourth quarter.

Hotel revenue in the third quarter was $49.3 million, up from $45.9 million in the second quarter. As of Sept. 30, The Cosmopolitan had 2,995 rooms available, with an additional 448 rooms completed during the quarter.

Average daily room rate and occupancy for the third quarter were $233 and 83.7 percent, respectively, generating revenues per available room of $195.

Food and beverage continued to represent the largest piece of The Cosmopolitan’s earnings pie. The property earned $68.9 million in the third quarter from food and beverage alone.

In its earnings report, Nevada Property 1 said a 65,000-square-foot, 1,800- seat showroom, 19 additional condominium or hotel units and a restaurant will be completed at a later date "as management deems appropriate based on various factors, including market conditions."

As of Sept. 30, Nevada Property 1 had $73.1 million in available cash.

"The Cosmopolitan will continue to focus on delivering high-demand, distinctive experiences to Las Vegas," the company’s statement said.

"Nearing our one-year anniversary, we are proud to have influenced the luxury market by consistently delivering first in-kind experiences that resonate with visitors to Las Vegas."

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